EP 1130-2-500
27 Dec 96
CHAPTER 12 - CHALLENGE COST SHARING PROGRAM
12-1. Purpose. This chapter establishes guidance for challenge cost-sharing agreements.
12-2. Background. The challenge cost-sharing program, authorized by Section 225 of the Water
Resources Development Act of 1992, provides opportunities for public and non-Federal groups
and individuals to contribute to and participate in the operation and/or management of recreation
facilities and natural resources at Corps water resource development projects. Partnering with
others provides a way to stretch the Corps of Engineers budget by sharing the cost of operating
and managing recreation facilities and natural resources.
12-3. Guidance.
a. A sample financial work sheet that itemizes the monetary value of each party's
contribution is in Appendix T and will be completed as part of the agreement. A sample challenge
cost-sharing agreement is included in Appendix U.
b. Discretion to Decline. Challenge cost-sharing opportunities may, due to the nature of
the proposal; its use; conditions imposed; profit motive or the character or notoriety of the
contributor; appearance contrary to, compromising or inconsistent with the laws, regulations,
purposes, principles, integrity, standing, or reputation of the Corps of Engineers, the United
States Army or the Government, be declined at the discretion of the Commander or a designated
representative. Challenge cost-sharing opportunities that would create or give the appearance of
a conflict of interest or have conditions inconsistent with the Corps mission must be declined.
c. Services. Services that the partner performs as a part of the challenge cost-sharing
program are to be carried out in conformance with Federal, State and local laws and standards.
For the purpose of determining the value of the partner's services, the actual labor cost will be
used.
d. Materials and Equipment. The value of materials and equipment should be determined
using the local market value of comparable items for purchase, or rent if for short-term use.
e. Operation of Vehicles, Vessels and Equipment. Partners may be authorized to operate
Government-owned or leased vehicles, vessels or other equipment if deemed appropriate and
beneficial. In such cases, the same licensing policies and procedures that apply to Corps
personnel in similar situations will apply to partners. Partners who are assigned to operate
machinery or equipment (such as chain saws, power shop tools, or specialized equipment) must
first have demonstrated proficiency in the operation of that equipment and understanding of safety
requirements to the satisfaction of the Corps.
f. Safety. All safety rules and regulations apply to work accomplished with challenge
cost-sharing agreements. Safety training provided to Corps personnel will also be provided to
partners performing services, including review of the "Activity Hazard Analysis." Injuries to
partners performing services will be reported in the same manner as those involving Corps
personnel. The reporting procedures will be the same except that item 17 on ENG Form 3394,
U.S. Army Corps of Engineers Accident Investigation Report, will be checked "other - partner."
12-1
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